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2024 (1) TMI 1012 - HC - GSTRefund amount recovered coercively - Despite paying 20% of the tax in dispute, the tax authorities issued a demand and forcibly recovered the full balance - GST Appellate Tribunal is not constituted - HELD THAT - In the case of Sita Pandey v. State of Bihar and Ors. 2023 (9) TMI 272 - PATNA HIGH COURT , it was directed to refund the tax recovered and also a cost was imposed on the Assessing Officer, who acted peremptorily that too against the statutory provision. In the present case, it is also directed that the entire amounts recovered as on 07.01.2023, be refunded to the assessee within a period of two weeks from today, failing which interest shall run at the rate of 12 per cent per annum. If the amounts are satisfied within two weeks, as directed hereinabove, it is made clear that if eventually the demand is confirmed against the assessee, there shall not be any interest claimed under the statute between the date on which the amounts were credited by the bank and the date of refund as directed hereinabove; since the State had the benefit of the amounts in its coffers. A cost of Rs. 5000/- imposed on the Officer, who issued the demand produced as Annexure-16 and appropriated the money from the bank account of the assessee/petitioner. Petition allowed.
Issues involved:
The judgment addresses the issue of recovery proceedings initiated by tax authorities without a constituted Appellate Tribunal as mandated by the Bihar Goods and Services Tax Act. It also examines the validity of recovery actions taken against a public sector undertaking despite payment of 20% of the tax in dispute after the first appeal was rejected. Issue 1: Appellate Tribunal Constitution The judgment notes that on 21.09.2022, an appeal filed by the assessee/petitioner against the assessment order was rejected due to the absence of an Appellate Tribunal as required by Section 109 of the Bihar Goods and Services Tax Act. Despite the payment of 20% of the tax in dispute post-rejection, a demand was issued on 05.01.2023, leading to coercive action by tax authorities. Issue 2: Recovery Proceedings The Court criticizes the recovery actions taken by tax authorities when 20% of the tax was paid after the first appeal was rejected, emphasizing that without a constituted Tribunal, no further recovery proceedings should have been initiated. The judgment cites a previous case where recovery under similar circumstances was disapproved. Issue 3: Legal Provisions and Natural Justice The judgment delves into legal provisions such as Section 112 of the Central Goods and Services Tax Act, emphasizing the mandatory payment requirements for instituting an appeal. It also discusses the proviso to Section 78, highlighting the need for proper officer to record reasons in writing for expedient recovery. The Court stresses the importance of natural justice principles in coercive actions, requiring proper communication and specified time for payment. Issue 4: Judicial Directions Referring to a previous decision, the Court directs the refund of the recovered tax amounts and imposes costs on the Assessing Officer for acting against statutory provisions. The judgment orders the refund within two weeks and specifies interest rates for delayed refunds. Additionally, a cost is imposed on the Officer who issued the demand and appropriated funds from the petitioner's account. In conclusion, the writ petition is allowed based on the terms set forth in the judgment, emphasizing adherence to legal provisions, natural justice principles, and proper procedures in tax recovery proceedings.
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